The more I think about it, the more convinced I am that the Go is going to come in at $250 as a base price (and if the rumors of 8GB and 16GB models are true, I could see $249/$299 price points--or $249 for the 'core' pack, then $299 for the various bundles.)
This is largely because I don't think the PSP-3000's price is likely to go anywhere any time soon. There are currently at least three bundles for preorder at $199--Rock Band, Dissidia, and the lilac Hannah Montana bundle. While a pre-release price-drop is certainly possible, I'd have expected them to hold off on announcing the bundles that are still months off until after the price drop. And if the Go is supposed to exude premiumness on the shelf, it's not going to want any pricing overlap with its gamer-oriented sibling.
I'm also pretty convinced that if there is any sort of upgrade path available for current owners, it's going to be a pain in the ass and not free. Any do-it-at-home method would enable people to rent (or buy and return) UMDs and stick them on the shiny, unhacked PSP Go. Any mail-in method will wind up costing shipping & handling so probably $5 a game or so.
There are still a ton of questions here--exact pricing, the terms of the battery life (which one would initially assume would benefit hugely from lack of UMD, but looking at how thin the PSP Go is, there's not exactly a ton of space for a battery in there), any improvements they may make in the Sony Store to make purchasing DD games more friendly (touchscreen would have been nice for typing voucher codes, if nothing else.), and how many publishers Sony's actually got completely on-board with their plans. Anyone releasing a major UMD game in the next couple months would do well to also offer a DD option, too, so I hope their E3 announcement includes the immediate availability of a ton of new-to-DD games.